NetSpend 2010 Annual Report Download - page 90

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Table of Contents
NetSpend Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
December 31, 2008, 2009 and 2010
NOTE 9: DEBT (Continued)
The following table presents the availability under the $135.0 million revolving credit facility as of December 31, 2010:
In addition to balances under the new credit facility, as of December 31, 2010, the Company's debt includes a capital lease entered into in
2009 for the purchase of software. During the years ended December 31, 2009 and 2010, the Company made payments of $0.8 million and
$1.4 million towards the capital lease, which included interest payments at an effective interest rate of 6.0%. The aggregate amount of required
payments remaining under the capital lease as of December 31, 2010 is $1.4 million, all of which is due in 2011.
NOTE 10: FAIR VALUE OF ASSETS AND LIABILITIES
Fair value is defined in U.S. GAAP as the price that would be received from selling an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. When determining the fair value for applicable assets and liabilities, the
Company considers the principal or most advantageous market in which it would transact and considers assumptions market participants would
use when pricing the asset or liability, such as inherent risk, transfer restriction, and risk of nonperformance.
The Company's financial instruments include cash, cash equivalents, accounts receivable, long-term investments, accounts payable and
borrowings under the revolving credit facility. As of December 31, 2009 and 2010, the fair values of cash, cash equivalents, accounts
receivable and accounts payable approximated the carrying values presented in the Company's Consolidated Balance Sheets because of the
short-term nature of these instruments.
As of December 31, 2010, the assets measured at fair value on a recurring basis consisted of a long-
term investment of $2.1 million, which
was recorded at its fair value based its quoted price on the NASDAQ stock market.
As of December 31, 2009, the outstanding borrowings under the Company's prior credit facility were term loan borrowings that bore
annual interest at the greater of 6.0% or an adjusted market rate (see Note 9). As of December 31, 2009, the estimated fair value of the
Company's outstanding term loan borrowings approximated the carrying value presented in its Consolidated Balance Sheets based on
discounting the expected future cash flows using current market rates as of December 31, 2009.
During the year ended December 31, 2010, the Company extinguished its prior credit facility, repaid all its outstanding term loan
borrowings and entered into a new credit facility. As of December 31, 2010, borrowings under the Company's new credit facility were variable
interest rate borrowings bearing annual interest at an adjusted market rate (see Note 9). As of December 31, 2010, the fair value of borrowings
under the new credit facility approximated the carrying value based on prevailing market rates for borrowings with similar ratings and
maturities.
84
(in thousands of dollars)
Total available revolving credit facility
$
135,000
Less: outstanding revolving credit
loans
(58,500
)
Less: outstanding swingline loans
—
Less: outstanding letters of credit
—
Remaining availability under the
revolving credit facility
$
76,500